Summer can also be home improvement time for
millions of Americans. From painting, to yard and landscape improvements, to
full-blown home renovations and additions, summer is the time when many
homeowners work to spruce up or just maintain their residences. Aside for
increasing your home's value, fixing up your home can help lower any future tax
liability.Before we look at what you can do to help save
on taxes, we need to clear up how the IRS defines a home repair and a home
improvement for tax purposes. The terms "repairs" and "improvements" can be confusing as they are used
regarding taxes and application to the value of your home, and each one has
different implications. A repair or maintenance expense that fixes or simply
maintains a part of the home is not tax deductible and cannot be added to the
basis of your home, so there is no tax benefit here. Examples of these include
repairing a broken water pipe, fixing a leak in a roof with a patch, or
painting your home.Yet
a home improvement is much more of a tax benefit, because it adds to the value
of your home and can then be added to the basis. For example, adding a new
roof, an energy-efficient window or door, hot water heater, or even a new room
are, all considered improvements, as is landscaping. While you own your home,
keep a record of the cost of improvements you make that add value, such as
landscaping, patios, swimming pools, decks, room additions and roof
replacements.When
it comes time to sell, subtract the cost basis from the sale price to determine
any gain. Currently, only the first $250,000 in gain ($500,000 of married
filing jointly) is exempt from being taxed. Any gain above that may be subject
to income taxes.The
home is typically the largest single asset most taxpayers own, and it's often
the one that takes the most work to keep in the best shape possible, in terms
of both time and money spent. While you can't get time spent on home
improvements back, you can often get some of your dollars returned either at
tax time or when you sell, provided that you track of all of your costs as you
own and work on your home. By having your receipts on hand, down the road when
you sell your home, you can avoid hitting a big tax gain—and a substantial tax
bill. Like many things, a little time spent preparing now can help you enjoy
the tax benefits in the future.

Look for ways to participate in tax-free savings
opportunities. Many companies offer a
401(k) program, which is a helpful way to save and reduce your taxable income. The maximum contribution amount is $17,500. A
simple tax tip is to become involved with a 401(k) plan and to try to
contribute the maximum amount. If you’ve been unable to participate thus far this year, see if
contributing or even increasing your contribution for the remainder of the year
might work. If you turn 50 this year,
or are already 50 or older, you can increase your contribution by an additional
$5,500.

Happy Father’s Day to all of the dads out there! Did you know that not only are there a great
many tax considerations related to fatherhood, but many of them are often
overlooked. Your tax return is a
unique place to take advantage of tax
benefits that come with being a dad. Here are just a few of those tax tips and
considerations:

To
start with, there is no better tax benefit than having a new child and
dependent on your tax return. Most likely you may now be able to claim an
additional exemption amount for the new dependent as well as the various tax
credits related to a child. The credits
include the Child Tax Credits, Child and Dependent Care Credit—more commonly
referred to as the “daycare credit,” and even the Earned Income Tax Credit for
families with an income of less than $51,567.

If this
is your first Father’s Day, you may be able to claim the medical expenses you
paid since January for the birth of your child and all well-baby and first-time
parent medical check-ups.

If
you coach, umpire, or otherwise volunteer your services for your children’s activities,
you may be able to claim a charitable contribution deduction. Your mileage to and from the volunteer
activity is deductible at 14 cents per mile and out-of-pocket expenses for
supplies, equipment, and uniforms necessary to participate in the volunteer
activities are also deductible as a charitable contribution. So keep those receipts and a mileage log for
all your travel as a volunteer in youth organizations.

If your children are under the age of 13 and you sent them to a day camp while you and your
spouse worked this year, you may
be able to include your expenses for the day camp with other child care
expenses you paid during the year to claim a the credit for child care expenses.
You are allowed a credit of between 20 and 35 percent of your expenses up to
$3,000 for one child and $6,000 for two or more children when you file your
income taxes. Make sure you get a receipt from the daycare provider(s) and the day
camp.

If
you are a single dad, don’t forget to file with the correct filings status. You may be eligible to use the Head of
Household filing status if you have physical custody of your child, are single,
and provide the main support of your household. This will qualify you for lower
tax rates, higher credit amounts and potentially many other tax benefits.

Being a dad is hard work that
brings with it personal reward but sometimes with seemingly little financial
reward. Ironic as it may seem, your tax return can be a place to pick up some
of those financial rewards for being a dad.

If
you are planning on a child graduating and going out on their own, having a
baby, having a child start college, retiring, or even becoming the primary
care-giver for an aging relative, you may have hidden tax deductions you weren’t
aware of. These and many other major
life changes can provide many tax deductions and credits that you can plan for
now to maximize your tax benefits at tax time.